Carl Icahn sells out of Netflix, touts Apple instead

“For Carl Icahn to make the same percentage return on his Apple stake in the next three years as he made on his Netflix holdings in the last three, Apple would have to be worth $9tn in 2018,” Stephen Foley and Matthew Garrahan report for The Financial Times.

“Nonetheless,” Foley and Garrahan report, “Mr Icahn cemented his position as one of Apple’s most enthusiastic public boosters on Wednesday, as he also revealed that he has sold the remainder of his Netflix stock for a $2bn total profit.”

Foley and Garrahan report, “Mr Icahn’s hedge funds have $6.8bn tied up in Apple shares, just under 1 per cent of the $745bn company. Apple’s price has already doubled since he took his initial stake in August 2013, and he has been one of the company’s biggest cheerleaders on Twitter and in television interviews. Apple is the sort of company that only comes along twice in a century, he said last month, and it has an ‘absurd’ low valuation.”

Read more in the full article here.

MacDailyNews Take: AAPL is seeing a bit of a bounce off the news as well.

21 Comments

    1. Only a fool would buy AAPL for the dividends. They are a pittance compared to the growth. About 2% compared to 50% per year. Which is the better value?

    1. As a speculator of course he will dump AAPL at some point, but that won’t be at an arbritary multiple like double, it will be when he can see an opportunity to put that money somewhere where he believes that it would do better than in AAPL.

    2. Whenever Icahn starts selling, the regular Joe investor will find out *after* Icahn has significantly reduced his stake. Then the price will fall and the individual investor will bear the burden of either getting out at a lower price or hanging on for the eventual rise.

      The big guys can create their own boom/bust cycles in the stock market. The rest of us are just in for the ride.

  1. I’m surprised Icahn sold his Netflix stock even after the past gains. Everyone claims it’s the perfect stock to own and Reed Hastings can do no wrong. I wish I’d had the smarts to buy Netflix after it had dropped however, I thought it was too expensive for an online video store. I sure was wrong. I just don’t get it. It would seem to be so easy to duplicate by a company with deep pockets.

    As far as I’m concerned, Amazon Prime Instant Video is nearly as good for a lot less money. Netflix isn’t even as good as Popcorn Time for new movies and recent TV series. I’m already overloaded with more content than I can watch. Yet Wall Street claims Netflix has unlimited growth. I honestly don’t understand it.

    Apple seems to be making all the money but it’s Netflix shareholders who are getting rich as the share price and P/E climbs to the moon. A P/E of 176 or so doesn’t seem possible. No way they can make that sort of revenue.

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